In a perfect world with unlimited budgets and inexpensive media costs, when markets tighten up, a dealership would be able to run image-building TV commercials on every local newscast every night of the week AND run two hard-hitting radio, newspaper and direct mail promotions each month. But in reality, when the market tightens up, you need to spend a higher percentage of your budget on "direct return" advertising-PROMOTIONS!
Running radio and newspaper is one thing, but do you promote as well? In tough times, you must give the customer a reason to buy today instead of waiting until "after Christmas," "when we get our IRS refund check," "when we pay off the washer and dryer" or any of the hundreds of reasons people put off the buying decision. PROMOTIONS give the customer a reason to buy today!
What makes a promotion work? Here are a few tidbits I've learned working with over 700 dealerships on over 5,000 promotions:
Promotions must be "bought into" whole-heartedly. If the sales managers and salespeople are ill informed and unexcited, the greatest offer in the history of the industry won't sell cars.
The more unique factors a promotion has, the better it will draw. Off-site sales, tent sales, special hours, closed for business the day before a sale, spotlights, huge signs and banners, radio remotes and special lot arrangementsthey not only convince the public something special is going on but even more importantly, they convince your salespeople.
Look for what's working, not just what's new. A proven promotion may seem "old hat" to your staff because you've run it three years in a row, but it may be brand new to the public. Change your commission structure, spiffs and contestsdo ANYTHING to make it unique for your salespeople, but run a proven promotion.
Don't skimp! My dad always tells me to "make a decision and then make it right!" Don't cut back on parts of a promotion because you're not 100% sold on it. Either run it right or don't run it at all.
PLAN-PREPARE-EXECUTE-ANALYZE-FOLLOW UP To be honest, after all the hard work and creativity we try to put into a promotion, one element stands out as the determining factor in the success of a promotion. The dealerships that run promotion after promotion successfully have SOMEBODY in an authoritative position that likes to promote! Hey, these things are hard work! Somebody in the dealership has to enjoy the Planning, Preparation, Execution, Analysis and Follow-up that goes into running one major promotion every month. These are the people who get a charge out of trying to set sales records, who enjoy thinking of ways to motivate salespeople, who enjoy rearranging the lot or the showroom, who bring in a surprise speaker at a sales meeting, who make sure the first customer on the lot buys a car, who make sure that every deal gets worked in every way possible through every lender before saying it's dead. They get an adrenaline rush from a big sales day! They recognize the sales carryover and energy created by having one major promotion every month of the year!
When the market tightens and dealers ask me what I'm hearing from around the country, my answer is almost always, "The guys who are working hard, spending some money and running good, solid promotions are getting the lion's share of the business and making money. The guys who are waiting for the market to break before they spend any money are trying to minimize their losses." If the manufacturers truly want to reduce the number of dealerships, THAT is the strategy they need to suggest to dealers because the dealerships waiting for the market to break are disappearing.
Planning, preparing and executing one major promotion each month is the only way a dealership will reach its manifest destiny. Have a great selling day!